The Stornoway Trust has blasted suggestions that they would be unable to raise the cash necessary to buy a 20 per cent stake in the proposed Stornoway wind farm.
The project is being driven by Lewis Wind Power (LWP) made up of EDF Energy and Amec-Foster-Wheeler. They have offered the Trust the option of buying 20 per cent of the 36-turbine wind farm.
But criticism of the ability of the Trust to raise the estimated £50m finance needed for the community stake emerged earlier this week.
Comments from interested spectators included: “It’s never going to happen” and “no one will lend them money without having any security over the income stream”.
However Stornoway Trust Factor Iain M Maciver slated, what he described as the negative interventions, as inaccurate and misleading.
Mr Maciver’s reaction follows a media release which featured one of Scotland’s leading green energy experts Mark Stewart, Head of Infrastructure and Renewable Energy at Johnston Carmichael.
His team has transacted on more than £1.5bn of deals, including most of the significant community projects.
Asked directly about the offer Mr Stewart said the Trust would need to raise around £50m for the stake.
He continued: “On the face of it this looks appealing, but in reality, it is probably an offer that can never be taken up as the Stornoway Trust does not have that sort of cash and no one will lend them money without having security over the project’s income stream. EDF has all the control.”
The offer is under close scrutiny because crofting townships – Sandwick North, Sandwick East, Melbost and Aiginish – have applied to the Crofters Commission to build community owned turbines on the same area of land.
Mr Stewart explained that it would be easier for the townships to raise finance.
“A stand-alone community-owned vehicle would be able to provide funders with the required security at the outset to make the deal viable. We have advised on a number of 100 per cent owned community projects and I am confident that a project of this magnitude would attract interest from a number of funders.
He concluded: “Why would anyone want 20 per cent of something so valuable when they could have 100 per cent?”
Western Isles Councillor Angus McCormack, chair of the Point and Sandwick Trust which operate the UK’s largest community wind farm, agreed, saying: “Based on our experience with funding our wind farm, which cost £13 million, it is extremely unlikely that any funder would finance this given that they have no security over their lending.
“From a lender’s point of view, lending £40m to the Stornoway Trust to buy 20 per cent of EDF’s wind farm would mean that they would actually have less control over the assets than when they are lending to an ordinary householder for a mortgage — and that’s never going to happen.”
But Stornoway Trust Factor, Iain M. Maciver told the Gazette: “The Stornoway Trust has sought expert investment advice from arguably one of our nation’s leading financial firms who believe it is eminently possible for the Trust to achieve a twenty percent stake for the community.
“What is equally clear is that negative interventions of this nature, which the Trust believe to be of little substance, could prejudice the political goodwill that appears to be growing in support of a project which can create a brighter and more sustainable economic future.”
Mr Maciver concluded that the inaccuracies and tone of the release was an attempt to mislead and deceive the reader into believing the credible existence of a more viable alternative.